Ireland should not be afraid of increased contributions to the EU budget after the UK’s departure and should seek firm commitments that the EU will give Ireland clear financial support in a post-Brexit environment, Brian Hayes suggested today.
“I don’t see any scenario where Member States’ budgetary contributions will remain the same after Brexit. When the UK formally leaves and stops paying EU membership contributions, there will be a €13 billion budget hole which needs to be filled in one way or another.
“Ireland should be prepared to pay increased contributions to the EU budget after the UK leaves. A strong European Union post-Brexit is of huge importance to Ireland; we need to be a key driver of the EU’s future success.
"Just as Ireland has received so much from the EU in monetary terms since 1973 when we joined, we should be ready to give back. Solidarity with the EU is a two-way street."
Mr Hayes comments come as the eurozone economy enjoyed its best year in a decade over 2017 according to official figures.
Eurostat, the European Union's statistics agency, said the eurozone expanded by 0.6% in the final quarter of the year from the three months before.
This means that for the whole of 2017, the eurozone economy grew by 2.5%, its highest level since 2007, when it expanded by 3%.
Mr Hayes also went on to suggest that as Ireland pays more into the EU budget it would be able to set the rules on how the budget is devised.
"And our voice at the EU decision making table will be much more significant. With more contribution comes more clout.
“At the higher end of the spectrum, our budgetary contributions could increase by up to €200 million per year to account for the budget gap left by the UK and to account for proposed higher contributions to the EU budget."
The Fine Gael MEP went on to point out that Budget Commissioner Gunther Oettinger has suggested that the EU budget could be increased from 1% of GDP to 1.1% GDP and that calculations have shown that Brexit alone could increase our contributions by €140 million per year.
“In his speech to the European Parliament this week, Taoiseach Leo Varadkar said that he is open to contributing more to the EU budget. But it’s time that we have a proper national debate about these issues. In the wider context of our overall government expenditure - around €55 billion annually - an increase of, say, €200 million going to the EU budget is relatively small.
“If our contributions do rise dramatically, the government needs to get return commitments from the EU. Firstly, the EU should be willing to contribute to a Brexit contingency fund to help certain sectors that may be severely affected by Brexit.
"Secondly, we should seek enhancements to the EU fiscal rules so that there is more of a focus on public investment in infrastructure and housing. Thirdly, we should get EU assurances on continued levels of funding in our transport infrastructure and agricultural subsidies.
Mr Hayes said that this week, the EU started the process of launching the multiannual budget debate which will define the EU budget over a 7 year period from 2021-2027.
"The government has not yet given a clear view on whether it supports an increase in overall EU spending among Member States. But it should be seriously considered that an increase in spending is needed to keep EU funding programmes on things like research, health and agriculture running at the same level. We want a strong EU post-Brexit and a sufficient budget is needed.
“Since 1973, Ireland has received almost €50bn in net EU contributions, mostly through CAP subsidies and infrastructure investment. In 2014 we went from being a net beneficiary to a net contributor and every year since we have contributed in a positive way to the EU budget.”